Telstra has revealed the addition of almost one million new mobile services in the six months to December 2011, but Sensis revenues plummeted 24 percent in 12 months.
Of course 'free' cellphones are nothing new: 100 percent subsidised handsets to people willing to lock themselves into long term (two year) contracts have been around for ages, and are still popular in many markets. The trouble with Schmidt's idea is that those who are prepared to put up with the inconvenience and intrusiveness of adverts in return for a free phone are likely to be those with limited disposable income: hardly an advertiser's prime target.
And the idea is not entirely new: it was tried in Australia almost a decade ago in the form of giving customers free phone calls in return for a few seconds adverts at the start and a few more every few minutes or so during the calls.
It was a great idea. At least that is what a lot of investors thought. They pumped in no less than $A24 million in a IPO that gave the company that dreamed it up a market capitalisation of $A73 million. By April 2001 it had signed up 65,000 subscribers and, still burning cash at the rate of $600,000 per month suspended its services.
Less than a year ago another company, Empowered Communications launched a similar idea on a VoIP service. That does not appear to have taken the world by storm either. More recently, Western Union, operator of one of the world's largest money transfer services, launched in Australia and New Zealand its loyalty programme offering free international phone calls to frequent transferers.
Schmidt's idea is just the latest in a long line of such ideas, and the electronic equivalent of the print advertising industry's endless search for new bits of 'real estate' on which to put advertisements. The latest one I heard was someone thought of paying you to put adverts on your car.
Now there's an idea! Give someone a free phone in return for a "sponsored ring tone" under the advertiser's control. One day my phone could chirp "things go better with Coke" and the next :Oh "what a feeling. Toyota!" Even better I could be paid for every call I receive. Of course the advertiser would want to make sure I could not put my phone on silent. But hey, if the price is right I might just wear it.
David Bass
| For the fourth year in a row, IDC has placed content security provider Websense (NASDAQ: WBSN) at the top of the IDC Worldwide Web Security 2011 –…
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